FR Doc 05-12626

[Federal Register: June 27, 2005 (Volume 70, Number 122)]
[Proposed Rules]
[Page 36865-36899]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr27jn05-25]

-----------------------------------------------------------------------

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 101

[Docket No. RM04-12-000]

Accounting and Financial Reporting for Public Utilities Including
RTOs

June 2, 2005.
AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Notice of proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: The Federal Energy Regulatory Commission (Commission) is
proposing to amend its regulations to update the accounting
requirements for public utilities and licensees, including independent
system operators and regional transmission organizations (collectively
referred to as RTOs). The Commission is also proposing to amend its
financial reporting requirements for the quarterly and annual financial
reporting forms for these entities. These updates to the Commission's
Uniform System of Accounts (USofA) and the financial reporting
requirements are being proposed to accommodate the evolving electric
industry due to the availability of open-access transmission service
and the increasing competition in wholesale bulk power markets.
These proposed updates to the Commission's accounting and reporting
requirements will allow the Commission and the public to be better
informed with respect to transactions and events affecting public
utilities, including RTOs, subject to the Commission's accounting and
reporting regulations. As a result of improved transparency of
financial information, the Commission and the public will also be
better able to understand the costs of RTOs.

DATES: Comments on the proposed rulemaking are due on or before August
26, 2005.

ADDRESSES: Comments may be filed electronically via the eFiling link on
the Commission's Web site at http://www.ferc.gov. Commentors unable to

[[Page 36866]]

file comments electronically must send an original and 14 copies of
their comments to: Federal Energy Regulatory Commission, Office of the
Secretary, 888 First Street, NE., Washington, DC 20426. Refer to the
Comment Procedures section of the preamble for additional information
on how to file comments.

FOR FURTHER INFORMATION CONTACT: John Okrak (Technical Information),
Office of Markets, Tariffs and Rates, Federal Energy Regulatory
Commission, 888 First Street, NE., Washington, DC 20426, (202) 502-
8280.
Julie Kuhns (Technical Information), Office of Markets, Tariffs and
Rates, Federal Energy Regulatory Commission, 888 First Street, NE.,
Washington, DC 20426, (202) 502-6287.
Lodie White (Legal Information), Office of the General Council,
Federal Energy Regulatory Commission, 888 First Street, NE.,
Washington, DC 20426, (202) 502-6193.

SUPPLEMENTARY INFORMATION:
I. Introduction
II. Background
A. General
B. NOI Comments on Accounting and Financial Reporting
III. Discussion
A. General
B. Proposed Regional Transmission and Market Operation Asset
Function
1. Proposed Accounts for Land, Buildings and Improvements
2. Proposed Accounts for Computer Hardware and Software Costs
3. Proposed Account for Communication Equipment Costs
4. Proposed Account for Other Property and Equipment Costs
5. Proposed Account for Asset Retirement Obligation Costs
C. Proposed RTO Revenue Accounts
D. Proposed Regional Market Expense Function
1. Proposed Accounts for Regional Market Expenses
2. Proposed Accounts for Maintenance Expenses
3. Customer Service and Administrative and General Expenses
4. Additional Disclosures
E. Proposed Accounting by Public Utilities for Computer
Hardware, Software and Communication Equipment
F. Proposed Accounting and Financial Reporting by Public
Utilities, Including RTOs
1. Proposed Accounts for Load Dispatching, Scheduling and System
Control Expenses
2. Proposed Accounts for System Planning and Standards
Development
3. Proposed Accounts for Study Costs
4. Proposed Accounts for RTO Billings
5. Proposed Accounts for Maintenance Expenses
6. Proposed Account for Revenue From Transmission of Electricity
7. Accounting for Settlement Amounts
8. Other Matter
G. Conclusion
IV. Proposed Effective Date
V. Proposed Changes to the FERC Quarterly and Annual Report Forms
VI. Information Collection Statement
VII. Environmental Analysis
VIII. Regulatory Flexibility Act
IX. Comment Procedures
X. Document Availability

I. Introduction

1. In this Notice of Proposed Rulemaking (NOPR), the Commission is
proposing to amend Part 101 of its regulations to revise its Uniform
System of Accounts (USofA) \1\ and to revise its quarterly and annual
financial reporting forms for public utilities and licensees. In brief,
the Commission proposes to update its USofA to accommodate the
restructuring changes that are occurring in the electric industry due
to the availability of open-access transmission service and increasing
competition in wholesale bulk power markets. These revisions will also
necessitate corresponding changes to the FERC Form No. 1, Annual Report
for Major Electric Utilities, Licensees and Others (Form 1); FERC Form
No. 1-F, Annual Report for Nonmajor Public Utilities and Licensees
(Form 1-F); and FERC Form No. 3-Q, Quarterly Financial Report of
Electric Utilities, Licensees, and Natural Gas Companies (Form 3-Q).
---------------------------------------------------------------------------

\1\ 18 CFR part 101.
---------------------------------------------------------------------------

2. The financial statements and related detailed schedules reported
in the Commission's quarterly and annual financial reports provide
information about each respondent's financial position, financial
performance, its source and uses of cash, its operating statistics, and
other information necessary to understand transactions and events
affecting the entity. Because it is important that the data reported in
their quarterly and annual financial reports are relevant, reliable,
understandable, and comparable among reporting entities, the Commission
requires these statements and reports to be prepared directly from the
accounting records maintained in accordance with the USofA.
3. An important objective of this proposed rule is to provide sound
and uniform accounting and financial reporting for transactions and
events affecting public utilities and licensees, including independent
system operators and regional transmission organizations (collectively
referred to as RTOs), that file financial reports with the
Commission.\2\ The Commission is of the view that updates to the
Commission's accounting and financial reporting regulations are needed
because certain RTO activities are not clearly or consistently
reported.
---------------------------------------------------------------------------

\2\ The Commission has explained that RTOs are public utilities,
and as such, they are required to follow the USofA and file Form No.
1. See PJM Interconnection, L.L.C., 107 FERC ] 61,087 (2004). For
purposes of this NOPR, the term RTOs refers to public utilities that
are performing regional transmission and independent system
operations.
---------------------------------------------------------------------------

4. The proposed accounts and changes to the Commission's quarterly
and annual financial forms will add visibility and uniformity to the
accounting and financial reporting for the cost of utility assets, and
the expenses the utility incurs in providing services, along with
revenues collected from RTO members. These proposed revisions to the
Commission's accounting and reporting regulations will allow the
Commission and the public to better understand transactions and events
that affect RTOs and their members.

II. Background

A. General

5. In April 1996, in Order No. 888,\3\ the Commission established
the foundation necessary to develop competitive bulk power markets in
the United States: non-discriminatory open access transmission services
by public utilities and standard cost recovery rules to provide a fair
transition to competitive markets. Public utilities were also required
to functionally unbundle, and to provide transmission service
separately from generation services.
---------------------------------------------------------------------------

\3\ See Promoting Wholesale Competition Through Open Access Non-
discriminatory Transmission Services by Public Utilities; Recovery
of Stranded Costs by Public Utilities and Transmitting Utilities,
Order No. 888, 61 FR 21,540 (May 10, 1996), FERC Stats. & Regs. ]
31,036 (1996), order on reh'g, Order No. 888-A, 62 FR 12,274 (March
14, 1977), FERC Stats. & Regs. ] 31,048 (1997), order on reh'g,
Order No. 888-B, 81 FERC ] 61,248 (1997), order on reh'g, Order No.
888-C, 82 FERC ] 61,046 (1998), aff'd in relevant part sub nom.
Transmission Access Policy Study Group, v. FERC, 225 F.3d 667 (D.C.
Cir. 2000), aff'd sub nom. New York v. FERC, 535 U.S. 1 (2002).
---------------------------------------------------------------------------

6. Despite the changes brought about by Order No. 888, reports of
discriminatory practices by vertically integrated public utilities
persisted. In Order No. 2000,\4\ the Commission encouraged the
formation of independent and regional organizations, to remedy undue
discrimination and to foster regional efficiencies and efficient
pricing. As a result, a number of RTOs

[[Page 36867]]

have formed and are in operation.\5\ These RTOs perform many of the
same activities previously performed by the transmission owners whose
transmission systems they now operationally control. In addition, RTOs
perform some unique functions; among other functions not traditionally
performed by other public utilities, they oversee markets and they
conduct long-term system planning on a regional basis. The formation of
RTOs has created the need to update the Commission's accounting and
financial reporting requirements to reflect the roles of RTOs and
provide more transparent and uniform accounting for and reporting of
certain activities not previously addressed in the Commission's
regulations.
---------------------------------------------------------------------------

\4\ See Regional Transmission Organizations, Order No. 2000, 65
FR 809 (January 6, 2000), FERC Stats. & Regs. ] 31,089 (1999), order
on reh'g, Order No. 2000-A, 65 FR 12,088 (March 8, 2000), FERC
Stats. & Regs. ] 31,092 (2000), affirmed sub nom. Public Utility
District No. 1 of Snohomish County, Washington, v. FERC, 272 F.3d
607 (D.C. Cir. 2001).
\5\ See, e.g., the California Independent System Operator
Corporation (CAISO), the Midwest Independent Transmission System
Operator, Inc. (Midwest ISO), the ISO New England, Inc. (ISO-NE),
the New York Independent System Operator, Inc. (NYISO), PJM
Interconnection, L.L.C. (PJM), and the Southwest Power Pool, Inc.
(SPP).
---------------------------------------------------------------------------

7. On September 26, 2004, the Commission issued a Notice of Inquiry
(NOI) in this proceeding.\6\ The NOI invited comments on various
matters including the Commission's accounting and financial reporting
requirements for RTOs. The Commission received comments from RTOs,
public utilities that are RTO members, state regulatory commissions,
and others.\7\
---------------------------------------------------------------------------

\6\ See Financial Reporting and Cost Accounting and Recovery
Practices for Regional Transmission Organizations and Independent
System Operators, 69 FR 58,112 (September 29, 2004), FERC Stats. &
Regs. ] 35,546 (2004).
\7\ See Appendix A for a list of commentors.
---------------------------------------------------------------------------

8. As noted in the NOI, the accounting regulations currently found
in the USofA and the related financial reporting requirements were
developed to capture financial information along traditional primary
business functions--generation, transmission and distribution of
electric energy. As a result, the accounting regulations and related
financial reporting requirements do not provide sufficient detailed
information about RTO-related costs, including the costs incurred by
RTOs and other relevant information concerning the types of services
RTOs provide to their members. The Commission sought comments on what
changes, if any, should be made in accounting and financial reporting.
9. The Commission is issuing this NOPR to address the accounting
and financial reporting issues raised in the NOI. The proposed changes
to the Commission's accounting and financial reporting requirements
will provide uniformity and transparency in accounting for and
reporting of transactions and events affecting public utilities,
including RTOs. The Commission expects that the proposed changes in the
accounting and financial reporting of data will lead to improvements in
cost recovery practices by providing details concerning the cost of RTO
functions and increased assurance that the costs are a legitimate and
reasonable cost of providing service and assigned to the correct period
for recovery in rates.

B. NOI Comments on Accounting and Financial Reporting

10. The Commission received numerous comments regarding the need
for updating the USofA for the accounting and financial reporting
public utilities including RTOs. Most commentors are supportive of
revising the USofA to reflect changes in the structure of the electric
industry.
11. Many commentors state that RTOs do not own generation,
transmission, and distribution facilities, and therefore many assets
and associated expense accounts are not applicable to RTOs. In their
view, RTOs settle transactions among market participants and assign
their operating costs to those participants. Thus, they say, there is a
need for new functional categories, new accounts and expanded reporting
requirements for RTOs and for individual transmission-owning public
utilities participating in RTOs.\8\
---------------------------------------------------------------------------

\8\ See, e.g., American Public Power Association, California
Department of Water Resources, Cinergy, Consolidated Edison Company
of New York, Inc., Iowa Office of Consumer Advocate and Indiana
Office of Utility Consumer Counselor, and NARUC.
---------------------------------------------------------------------------

12. Commentors further recommend the collection and development of
detailed and standardized information and reports in addition to the
data the USofA currently requires. In their view, to the extent that
all RTOs utilize a standard report format and use consistent cost
categories, it will be easier for the Commission and market
participants to understand the nature of the expenditures and compare
expenditures across RTOs. Commentors believe that standardization also
will enhance transparency of costs, and allow better understanding of
financial trends and other issues. They further urge the Commission to
revise its USofA and reporting formats to properly reflect the business
functions of RTOs and to provide more meaningful and transparent
financial accounting information.\9\
---------------------------------------------------------------------------

\9\ See, e.g., Connecticut Department of Public Utility Control
and Vermont Department of Public Service.
---------------------------------------------------------------------------

13. The Commission also solicited comments on whether RTOs or their
members that are public utilities should report data concerning the
transmission of electricity for others as required by FERC Forms 1 and
1-F. These commentors stated that because RTOs authorize, control, bill
and collect payments for transmission transactions, such transactions
should be reported by the RTO.\10\ They believe that this would be the
most efficient solution rather than requiring the RTO to provide the
information to its members, who in turn would include the data in their
respective filings with the Commission.
---------------------------------------------------------------------------

\10\ See, e.g., Allegheny Power, Consolidated Edison Company of
New York, Inc., Edison Electric Institute, Long Island Power
Authority and NiSource.
---------------------------------------------------------------------------

14. In addition to seeking comments on RTO accounting and financial
reporting, the Commission also sought and received comments on the
accounting and financial reporting by public utilities and licensees
that are members of an RTO.

III. Discussion

A. General

15. The Commission's accounting and financial reporting
requirements are designed to provide information about a reporting
entity's financial condition and results of operation. This information
is important in developing and examining rates and in making policy
decisions.
16. As the electric industry has transitioned from a vertically
integrated to an unbundled business model, and as the respective
functions of business entities have continued to evolve, the Commission
has relied on existing accounting and reporting requirements applicable
to existing public utilities (i.e., principally investor-owned
utilities) to obtain information about an RTO's financial condition.
The Commission has required public utilities, including RTOs, to
continue to prepare their financial statements in accordance with the
USofA as it could accommodate most of the transactions and events
affecting these entities. During this restructuring, it was difficult
to prescribe new accounting rules that could be uniformly applied.
While we expect this evolution to continue, sufficient experience has
now been gained to make some general observations about RTOs and the
adequacy of our existing accounting and reporting requirements for
these entities.
17. Over the past 7 years, in reviewing RTO proposals, the
Commission has confronted new and different business models, accounting
methods, and rate designs. RTOs are largely not-for-profit

[[Page 36868]]

companies with no shareholder investment. They use different classes or
types of assets and deploy these resources in a manner that does not
readily lend itself to traditional, functional utility plant
classifications (e.g., generation, transmission or distribution plant).
RTO assets are largely computer hardware, computer software, and
communication equipment. They allow the RTO to ensure reliability, to
operate and monitor competitive markets, to control and order dispatch
of resources on the system, and to coordinate and plan short and long-
term investment and construction.
18. In sum, the services provided by RTOs to their members, the
assets used, the costs incurred, and the revenues billed, do not
readily lend themselves to the existing accounting classifications
established for public utilities as noted by numerous commentors. As a
result, the accounting and the financial reporting by RTOs in the
Commission's quarterly and annual financial reports calls into question
the relevance, understandability and usefulness of RTO-related
financial information submitted to the Commission.
19. While most commentors to the NOI did not recommend a completely
new USofA to accommodate the services RTOs perform, the majority of
commentors suggest that more accounting detail is needed to better
identify assets, costs incurred and revenues earned by RTOs as well as
by other public utilities. After studying the comments received, the
Commission proposes to revise the existing USofA and financial
reporting requirements, as discussed below, rather than creating an
entirely new system of accounts exclusively for RTOs.

B. Proposed Regional Transmission and Market Operation Asset Function

20. In order to perform many of their primary functions, RTOs must
make significant investments in computer hardware, software and
communication equipment. The cost of these assets is not explicitly
provided for in the existing primary plant accounts, resulting in
inconsistent accounting and reporting for these assets.
21. To provide more financial transparency for the costs of
hardware, software and communication equipment, as well as to address
the inconsistent accounting and reporting noted previously, the
Commission proposes to create a new utility plant function to record
the cost of assets owned and used by RTOs. The proposed new asset
function will be entitled Regional Transmission and Market Operation
Plant, and contain the following primary plant accounts, as shown in
the table below:

------------------------------------------------------------------------
Regional Transmission and Market Operation Plant
-------------------------------------------------------------------------
Account 380, Land and Land Rights
Account 381, Structures and Improvements
Account 382, Computer Hardware
Account 383, Computer Software
Account 384, Communication Equipment
Account 385, Miscellaneous Regional Transmission and Market Operation
Plant
Account 386, Asset Retirement Costs for Regional Transmission and Market
Operation Plant
Account 387, Reserved
------------------------------------------------------------------------

22. The benefit of establishing a new asset function within the
existing accounting and reporting framework is that the cost of
property, plant and equipment used by RTOs will now be uniformly
reported by these entities. This new functional classification will
help provide comparability among RTOs that perform regional control and
market operations. The creation of a new RTO asset function will also
minimize inconsistent reporting of RTOs' major technology assets, which
include computer hardware, computer software and communication
equipment.
1. Proposed Accounts for Land, Buildings and Improvements
23. RTOs may own land, buildings and other long-lived fixed assets.
The USofA maintains a set of primary plant accounts to record the cost
of these types of assets by plant function. Therefore, the Commission
proposes two new accounts (Account 380, Land and Land Rights, and
Account 381, Structures and Improvements) to record the cost of land,
land rights and buildings within the new functional classification for
Regional Transmission and Market Operation Plant. These two new
accounts will provide consistent accounting classification for the cost
of these fixed assets.
2. Proposed Accounts for Computer Hardware and Software Costs
24. Most commentors identify computer hardware and software as the
primary assets used by RTOs and note that the existing USofA does not
provide sufficient cost detail concerning computer hardware and
software owned and used by public utilities. In particular, commentors
indicate that the cost to develop or purchase off-the-shelf software is
not readily transparent in the reports. In order to provide more
transparency to investments made by RTOs in computer hardware and
software, the Commission proposes the creation of new primary plant
Account 382, Computer Hardware, and Account 383, Computer Software.
25. RTOs use computer hardware and software to: (1) Manage bulk
power interchange contracts and scheduling within neighboring control
areas; (2) provide ancillary services; (3) provide data and other
information to market participants; (4) monitor markets and manage the
transmission system; (5) determine locational marginal prices (LMP);
(6) perform short-term and long-term modeling; and (7) provide training
on the systems.
26. Computer hardware used by RTOs generally includes servers,
workstations and other processors, peripheral equipment, information
technology equipment for energy management systems, and personal
computers. Computer software generally includes software licenses and
internally-developed software to perform the above mentioned tasks and
activities (e.g., scheduling, system control and dispatching, system
planning, standards development, market monitoring and market
administration).
27. The Commission proposes to create new primary plant Account No.
382, Computer Hardware. The addition of a new primary plant account for
computer hardware will include the cost of computer hardware initially
devoted to this function as well as subsequent additions, retirements,
adjustments and transfers of these

[[Page 36869]]

amounts.\11\ This information will be reported in the Form 1, thereby
providing additional transparency concerning computer hardware
transactions. Finally, because the computer hardware may perform
different activities, the Commission proposes to require RTOs to
maintain detailed records identifying these assets by the types of
activities they perform to the maximum extent practicable.
---------------------------------------------------------------------------

\11\ See FERC Form 1, Electric Plant In Service Schedule at 204.
---------------------------------------------------------------------------

28. The Commission also proposes to create new primary Account No.
383, Computer Software, to record the cost of developing and purchasing
software used by RTOs. Similar to computer hardware, software may be
used by different functions or departments within the organization.
Therefore, the Commission proposes to require that RTOs maintain
detailed records identifying the cost of software by the types of
activities or functions performed to the maximum extent practicable.
3. Proposed Account for Communication Equipment Costs
29. RTOs may own communication equipment such as microwave towers,
fiber optic cables, and other communication devices to provide system
control and dispatching activities. However, under the existing USofA
requirements, no specific primary plant account exists to record the
cost of these investments outside of general plant accounts. This has
led to respondents inconsistently reporting the cost of these
investments in various primary plant accounts.
30. To provide uniform accounting and financial reporting, the
Commission proposes to add a new primary plant Account 384,
Communication Equipment, to record the cost of communication equipment
owned and used by RTOs.
4. Proposed Account for Other Property and Equipment Costs
31. RTOs may also own property, plant and equipment not provided
for in the new regional control and market operation function. In order
to provide uniform accounting and financial reporting for the cost of
miscellaneous property, plant and equipment, the Commission proposes to
add a new primary plant Account 385, Miscellaneous Regional
Transmission and Market Operation Plant, to record the cost of
miscellaneous assets not provided for elsewhere.
5. Proposed Account for Asset Retirement Obligation Costs
32. As noted in Order No. 631, a public utility may incur a
liability resulting from a legal obligation to remove or retire a plant
asset.\12\ Entities may also incur a similar type of legal obligation
to remove or retire equipment or a plant asset used to provide regional
control and market operation services. To provide uniform accounting
and reporting for legal obligations associated with the retirement of
tangible long-lived assets owned and used by entities for these
purposes, the Commission proposes to add a new Account 386, Asset
Retirement Costs for Regional Transmission and Market Operation Plant,
to record the capitalized amount of the liability that becomes part of
the asset's cost.
---------------------------------------------------------------------------

\12\ See Accounting, Financial Reporting, and Rate Filing
Requirements for Asset Retirement Obligations, Order No. 631, 68 FR
19,610 (Apr. 21, 2003) and 68 FR 34,795 (June 11, 2003), FERC Stats.
& Regs. ] 31,142 (2003), order on reh'g, Order No. 631-A, 104 FERC ]
61,183 (2003).
---------------------------------------------------------------------------

C. Proposed RTO Revenue Accounts

33. RTOs do not buy or sell electricity; instead, they manage
transmission assets owned by others and settle transactions among
participants in a manner similar to a market clearing house. Similar to
the operation of a market clearing house, an RTO's operational costs
consist of the expenses incurred to provide services to its members.
The revenues received for the reimbursement of RTO operational costs
are not explicitly provided for in the current USofA because the
existing revenue accounts were designed to record revenues from
electricity sales or transmission or distribution. Therefore, the
existing revenue accounts are not entirely applicable.
34. The Commission therefore proposes the creation of two new
revenue accounts to record amounts billed by RTOs to their members. The
first, Account 457.1, Regional Transmission Service Revenues, will
include revenues received by RTOs for services provided.\13\ This new
revenue account will contain instructions requiring the RTO to keep
detailed records by type of service provided and the amounts billed
under each Commission-approved tariff. Furthermore, the Commission
proposes to include a new Form 1 schedule to report the revenue
collected by RTOs for services performed pursuant to Commission-
approved tariffs.
---------------------------------------------------------------------------

\13\ Such services will include, among other things, system
control, dispatching, long-term and short-term system planning,
market facilitation and market compliance activities.
---------------------------------------------------------------------------

35. In addition, the Commission proposes a new Account 457.2,
Miscellaneous Revenues, to record miscellaneous revenues received from
RTO members occurring from incidental transactions and events. This
revenue account would include revenues for commissions, profits or
losses on sales of miscellaneous materials, rentals, and other
miscellaneous sources of income.

D. Proposed Regional Market Expense Function

36. Many commentors indicate that the current USofA does not
provide sufficient financial transparency concerning the types of costs
incurred by RTOs in market facilitation and market monitoring
activities. Furthermore, as noted in Staff's report on cost ranges for
the development of RTOs, the expenses incurred by these entities have
not been consistently reported.\14\
---------------------------------------------------------------------------

\14\ See Staff Report on Cost Ranges for the Development and
Operation of a Day One Regional Transmission Organization (Docket
No. PL04-16-000 October 2004), which states in part:
Each organization used Generally Accepted Accounting Principles,
but reported investment costs and annual expenses differently. That
is, while one organization directly assigned costs to a particular
cost element or operational function, another respondent showed no
such cost element or operational function. The Uniform System of
Accounts, designed for the traditional vertically-integrated
utility, is not always aligned with the functions of an ISO or RTO.
Staff recommends review of the reporting requirements and possible
standardization to facilitate cost oversight by the public and the
Commission.
---------------------------------------------------------------------------

37. In order to give greater transparency to the RTO market
functions performed, the Commission proposes to create a separate
expense function within the USofA to record the expenses incurred in
managing and monitoring market activity.\15\ This new function,
entitled Regional Market Expenses, will contain the following expense
accounts as shown in the table below:
---------------------------------------------------------------------------

\15\ As part of implementing these changes, the Commission
proposes to rescind Accounting Release No. 16, Operating and
Administering an Electric Power Exchange, issued by the Chief
Accountant on October 1, 2001. This Accounting Release requires RTOs
to record operation, maintenance and market monitoring expenses in
Account 557, Other Expenses.

------------------------------------------------------------------------
Regional Market Expenses
-------------------------------------------------------------------------
Operation

[[Page 36870]]

Account 575.1, Operation Supervision
Account 575.2, Day-Ahead and Real-Time Market Facilitation
Account 575.3, Transmission Rights Market Facilitation
Account 575.4, Capacity Market Facilitation
Account 575.5, Ancillary Services Market Facilitation
Account 575.6, Market Monitoring and Compliance
Maintenance
Account 576.1, Maintenance of Structures and Improvements
Account 576.2, Maintenance of Computer Hardware
Account 576.3, Maintenance of Computer Software
Account 576.4, Maintenance of Communication Equipment
Account 576.5, Maintenance of Miscellaneous Market Operation Plant
------------------------------------------------------------------------

1. Proposed Accounts for Regional Market Expenses
38. RTOs perform unique services for their members such as market
facilitation, market monitoring and market compliance activities.
However, the existing USofA does not provide specific expense accounts
to record these types of expenses. The Commission proposes to add new
accounts to record the expenses related to these activities.
39. A new Account 575.1, Operation Supervision, will be created to
record the labor and expenses incurred in the general supervision and
direction of the RTO regional control and market operation center.
40. A new Account 575.2, Day-Ahead and Real-Time Market
Facilitation, will be created to record the cost incurred to manage
regional Day-Ahead and Real-Time markets. These activities include
administering markets that allow participants to buy and sell power,
arrange transmission service and other energy related activities.
41. Further, a new Account 575.3, Transmission Rights Market
Facilitation, will be created to record the cost to manage transmission
rights markets. In addition, a new Account 575.4, Capacity Market
Facilitation, will be created to record the cost to administer capacity
markets. A new Account 575.5, Ancillary Services Market Facilitation,
will be created to record the cost to manage ancillary service markets.
42. Finally, Account 575.6, Market Monitoring and Compliance, will
be created to record the cost to review market data for compliance with
market rules. It will also include the costs incurred to communicate
with external market monitors.
2. Proposed Accounts for Maintenance Expenses
43. As previously discussed, the Commission proposes new asset
accounts to record the cost of structures, computer hardware and
software, and communication equipment. These new asset accounts will
require the addition of new maintenance accounts to properly record the
routine and periodic expenses incurred to maintain these assets.
44. The Commission proposes new Account 576.1, Maintenance of
Structures and Improvements, to record the cost of labor, materials
used and expenses incurred to maintain structures used in regional
transmission and market operations.
45. Account 576.2, Maintenance of Computer Hardware, will be
created to record the cost of labor, materials used and expenses
incurred to maintain computer hardware. Account 576.3, Maintenance of
Computer Software, will be created to record the cost of labor,
materials used and expenses incurred for annual computer software
renewals, annual software update services and the cost of ongoing
support for software products.
46. The Commission also proposes the creation of Account 576.4,
Maintenance of Communication Equipment, to record the cost of labor,
materials used and expenses incurred to maintain communication
equipment. Finally, Account 576.5, Maintenance of Miscellaneous Market
Operation Plant, would record the cost of labor, materials used and
expenses incurred to maintain miscellaneous regional transmission and
market operation plant.
47. These new accounts when created, will provide greater detail as
to the amount of maintenance expenses incurred on computer hardware,
software, communication equipment and other assets owned and used by
the RTO.
3. Customer Service and Administrative and General Expenses
48. A review of several FERC Form 1s on file indicate that there
may be inconsistent accounting and financial reporting for customer
service and administrative and general expenses incurred by RTOs. For
example, some RTOs are including customer service, administrative and
general expenses in the transmission expense accounts as well as in the
administrative and general expense accounts. Under existing USofA
requirements, customer service and administrative and general expenses
are to be recorded in Accounts 903 through 935. The practice of some
RTOs, recording these costs in expense accounts within the transmission
function, is inconsistent with these requirements. Accordingly we will
require RTOs to comply with the existing USofA instructions of
recording customer service and administrative and general expenses in
Accounts 903 through 935.
49. As noted by some commentors, the above mentioned types of
expenses are already provided for in the existing USofA. Therefore, we
agree that there is no need to establish new expense accounts for these
types of activities or to add a new administrative function for use by
RTOs to record customer service and administrative and general
expenses. The use of existing accounts by RTOs will maintain
comparability to the maximum extent practicable since all reporting
entities will use the same administrative and general expense accounts
to record these types of costs.
4. Additional Disclosures
50. Under the existing Form 1 and 3-Q requirements, public
utilities are required to report detailed financial-related information
concerning the transmission of electricity for others. The Commission
sought comments on whether RTOs, in addition to public utilities that
file Form 1, should also report the data required by the Transmission
of Electricity for Others schedule.\16\
---------------------------------------------------------------------------

\16\ See Forms 1 and 3-Q, Transmission of Electricity For Others
Schedule at 328-330.
---------------------------------------------------------------------------

51. Since RTOs authorize, control, bill and collect payments and
distribute revenues for transmission transactions using the
transmission system under their control, the Commission proposes that
RTOs report the information

[[Page 36871]]

required by the schedule in their Form 1 filing. In this manner, the
Commission will have more complete information concerning the use of
the transmission system under the control of the RTO. The data required
by the schedule must be organized by the RTO in such a manner so that
the information is presented for each member or other entity for whom
the service was provided. Finally, the Commission will continue to
require public utilities and licensees to report the data required by
this schedule in their filing.

E. Proposed Accounting by Public Utilities For Computer Hardware,
Software and Communication Equipment

52. As previously mentioned, the existing USofA does not provide
for computer hardware, software and communication equipment owned and
used by public utilities and licensees, including RTOs. Therefore, in
addition to creating asset accounts to the record the cost of this
equipment for RTOs, the Commission proposes to add three new sub-
accounts to the existing transmission asset function for other public
utilities and licensees to record the cost of these types of assets, as
shown in the table below:

------------------------------------------------------------------------
Transmission Plant
-------------------------------------------------------------------------
Account 351.1, Computer Hardware
Account 351.2, Computer Software
Account 351.3, Communication Equipment
------------------------------------------------------------------------

53. Similar to RTOs, other public utilities and licensees will
record the cost of computer hardware, software and communication
equipment owned and used for transmission related activities in
proposed new primary plant accounts. The Commission proposes to create
Account 351.1, Computer Hardware, to record the cost of computer
equipment owned and used by public utilities and licensees.
Additionally, they will record the cost of computer software in Account
351.2, Computer Software, and the cost of communication equipment in
Account 351.3, Communication Equipment. The use of these three sub-
accounts will provide uniform and consistent accounting and reporting
for these types of assets by all public utilities and licensees.

F. Proposed Accounting and Financial Reporting by Public Utilities,
Including RTOs

54. Most commentors are supportive of revising the USofA to reflect
changes in the structure of the electric industry. They are of the view
that many of the updates could be accomplished through the addition of
new accounts or sub-accounts within the existing USofA accounting and
reporting framework. The Commission proposes to expand the expense
accounts contained in the transmission function to provide more
financial details concerning the activities and related costs incurred
by public utilities including RTOs in providing transmission service.
The Commission proposes to provide more details concerning dispatching,
system control and other cost of monitoring the transmission system by
providing more detailed expense accounts to record the cost of these
types of activities. Additionally, Account 561, Load Dispatching, will
be replaced with a series of detailed expense accounts added to the
existing transmission expense function as shown in the table below:

------------------------------------------------------------------------
Transmission Expense
-------------------------------------------------------------------------
Operation
Account 561.1, Load Dispatch-Reliability
Account 561.2, Load Dispatch-Monitor and Operate Transmission System
Account 561.3, Load Dispatch-Transmission Service and Scheduling
Account 561.5, Long-Term Reliability Planning and Standards Development
Account 561.6, Transmission Service Studies
Account 561.7, Generation Interconnection Studies
Maintenance
Account 569.1, Maintenance of Computer Hardware
Account 569.2, Maintenance of Computer Software
Account 569.3, Maintenance of Communication Equipment
Account 569.4, Maintenance of Miscellaneous Regional Transmission Plant
------------------------------------------------------------------------

55. Many commentors indicate that the current system of accounts
does not provide sufficient financial transparency concerning the types
of costs incurred by RTOs in providing member services. These services
may include scheduling, system control and dispatching, long-term
system planning, standards development, market facilitation and market
monitoring activities. Furthermore, as noted in Staff's report on cost
ranges for the development of RTOs, the expenses incurred by these
entities have not been consistently reported.\17\
---------------------------------------------------------------------------

\17\ See Staff Report on Cost Ranges for the Development and
Operations of a Day One Regional Transmission Organization, Docket
No. PL04-16-000 (October 2004). This staff report states in part:
Each organization used Generally Accepted Accounting Principles,
but reported investment costs and annual expenses differently. That
is, while one organization directly assigned costs to a particular
cost element or operational function, another respondent showed no
such cost element or operational function. The USofA, designed for
the traditional vertically-integrated utility, is not always aligned
with the functions of an ISO or RTO. Staff recommends review of the
reporting requirements and possible standardization to facilitate
cost oversight by the public and the Commission.
---------------------------------------------------------------------------

1. Proposed Accounts for Load Dispatch, Scheduling and System Control
Expenses
56. Public utilities and licensees, including RTOs, provide a
variety of transmission services including load dispatching, scheduling
and system control. In order to provide consistent and uniform
accounting and financial reporting by public utilities and licensees,
including RTOs, for these types of costs, the Commission proposes to
add new accounts to the transmission

[[Page 36872]]

expense function for these entities to record these types of expenses.
57. The Commission proposes to add a new Account 561.1, Load
Dispatch-Reliability, to include the costs incurred to manage the
region-wide reliability coordination function as specified by the North
American Electric Reliability Council (NERC) and individual reliability
organizations. It will include the costs to perform current and next
day reliability analyses including calculating load forecasts, perform
contingency analyses, identify unreliable operating conditions, and
recommend appropriate solutions.
58. The Commission proposes to add a new Account 561.2, Load
Dispatch-Monitor and Operate Transmission System, in order to include
the costs incurred to monitor, assess and operate the transmission
system and ensure the system's reliability.
59. The Commission also proposes to add a new Account 561.3, Load
Dispatch-Transmission Service and Scheduling, to include the costs
incurred to process hourly, daily, weekly and monthly transmission
service requests using an automated system such as an Open Access,
Same-Time Information System (OASIS).
2. Proposed Accounts for System Planning and Standards Development
60. Another important service that RTOs perform for their members
is long-term system planning and development activities. However, the
existing USofA does not provide a specific expense account to record
these types of expenses. The Commission proposes to add a new Account
561.5, Long-Term Reliability Planning and Standards Development, to
record the costs incurred by RTOs for performing long-term system
planning and standards development. This new account will include the
cost of labor, materials used and expenses incurred by the RTOs for
long-term system planning of the interconnected bulk electric
transmission system within a planning authority area. It will also
include expenses incurred for long-term system reliability and resource
planning to develop long-term strategies to meet customer demand and
energy requirements. Examples of costs include system modeling to
evaluate resource adequacy, simulation of transmission systems for such
assessments, and development of expansion planning.
61. Other expenses to be included in Account 561.5 include the
costs incurred to develop demand and energy end-use customer forecasts,
capacity resources, and demand response programs. Examples of such
activities include notifying participants of any planned transmission
changes that may impact their facilities. Account 561.5 will also
include the cost of developing and reporting on transmission expansion
and resource plans for assessment and compliance with reliability
standards, and developing reliability standards for the planning and
operation of the interconnected bulk electric transmission systems that
serve the United States, Canada, and Mexico.
62. To the extent that public utilities and licensees that are not
RTOs perform similar activities, they should include the costs that
they incur for system planning and standards development in Account
561.5.
3. Proposed Accounts for Study Costs
63. Public utilities and licensees, including RTOs, may incur costs
to perform generation interconnect and transmission service studies.
The USofA does not specifically provide accounts to record these types
of costs. The Commission proposes the creation of Account 561.6,
Transmission Service Studies, to record the costs incurred by public
utilities and licensees, including RTOs, to conduct studies for
transmission service requests. The Commission also proposes to add a
new Account 561.7, Generation Interconnection Studies, to record the
costs incurred by public utilities and licensees, including RTOs to
conduct studies for generator service requests when the costs are not
directly reimbursable by a specific customer. The instructions to these
accounts will require these entities to maintain detailed cost records
for each study performed.
64. Different types of agreements entered into by public utilities
and licensees, including RTOs, may necessitate recording the costs of
conducting transmission and generation interconnect studies, in Account
186, Miscellaneous Deferred Debits, pending reimbursement by the entity
requiring the service. Therefore, in order to provide more disclosure
concerning the costs of interconnect study activities being performed
by public utilities and licensees, including RTOs, the Commission
proposes to add a new schedule to the quarterly and annual financial
reports that will provide more specifics concerning the costs of these
activities.
4. Proposed Accounts for RTO Billings
65. Public utilities and licensees reimburse RTOs for the RTOs'
operational, administrative and general costs of providing service.
Many commentors indicate that these costs are already covered by the
existing accounting and reporting requirements. In order to provide
greater transparency for the payments made by public utilities and
licensees to RTOs, the Commission proposes to create three sub-accounts
as shown below:

------------------------------------------------------------------------
Transmission Expenses
-------------------------------------------------------------------------
Operation
Account 561.4, Scheduling, System Control and Dispatch Services
Account 561.8, Long-Term Reliability Planning and Standards Development
Services
------------------------------------------------------------------------
Regional Market Expenses
------------------------------------------------------------------------
Operation
Account 575.7, Market Facilitation, Monitoring and Compliance Services
------------------------------------------------------------------------

66. These sub-accounts will be used by public utilities and
licensees to record their share of costs billed to them by an RTO.
Additionally, the Commission proposes that each RTO include in its
monthly settlement statements a breakdown of the allocation of that
RTO's operational costs within each of the three sub-accounts discussed
below. This information will allow each RTO member to then record its
share of the RTO's total monthly operating costs in these new sub-
accounts.
67. The first new sub-account, Account 561.4, Scheduling, System
Control and Dispatching Services, will include scheduling, system
control and dispatching services costs billed to the public utility or
licensee. The second, Account 561.8, Long-Term Reliability

[[Page 36873]]

Planning and Standards Development Services, will include the cost of
long-term system planning and standards related costs billed to the
public utility or licensee. The third, Account 575.7, Market
Facilitation, Monitoring and Compliance Services, will include costs
for running the various markets and monitoring compliance activities
billed to the public utility or licensee.
68. The creation of three new sub-accounts will provide greater
transparency of RTO operational costs billed to public utilities and
licensees as users of the data will see the expenses being recorded in
the public utilities' and licensees' accounts for activities performed
by the RTO.
5. Proposed Accounts for Maintenance Expenses
69. As previously discussed, the Commission proposes new asset
accounts to record the cost of computer hardware, computer software and
communication equipment. These new asset accounts will require the
addition of new maintenance accounts to properly record the routine and
periodic expenses incurred to maintain these assets.
70. A new Account 569.1, Maintenance of Computer Hardware, will be
created to record the cost to maintain computer hardware for the assets
recorded in Account 351.1. Additionally, a new Account 569.2,
Maintenance of Computer Software, will be created to record the cost of
computer software renewals, annual software update services and the
cost of ongoing support for software products.
71. The Commission also proposes the creation of Account 569.3,
Maintenance of Communication Equipment, to record the cost to maintain
communication equipment for the assets recorded in Account 351.3.
Finally, the creation of Account 569.4, Maintenance of Miscellaneous
Regional Transmission Plant, is also proposed to record the cost to
maintain the assets recorded in Account 385, Miscellaneous Regional
Transmission and Market Operation Plant.
72. These new accounts, when created, will provide greater detail
as to the amount of maintenance expense incurred on computer hardware,
computer software, communication equipment and other assets owned and
used to service the transmission function.
6. Proposed Account for Revenue From Transmission of Electricity
73. Many commentors indicate that additional disclosure is
necessary by public utility transmission owners for revenues received
from RTOs for use of their transmission facilities. Public utilities
report revenues received for use of their transmission system in
Account 456, Other Electric Revenues, along with other sources of
revenues from miscellaneous activities. However, due to the changing
nature of the electric industry and open access transmission
requirements, the amount of revenue public utility transmission owners
receive for this use of their transmission system has been growing
significantly over the years.
74. In order to provide greater transparency by public utility
transmission owners for the revenues received for use of their
transmission facilities, the Commission proposes to add a new sub-
account for Account 456, Other Electric Revenues, to record these
sources of revenues. A new sub-account entitled Account 456.1, Revenues
From Transmission of Electricity of Others, will record revenues the
public utility receives for the transmission of electricity over its
transmission facilities.
7. Accounting for Settlement Amounts
75. Finally, commentors also provide differing methods as to the
best way to provide transparency related to transactions settled
through an RTO. According to some commentors, public utilities
currently record the net settlement amounts for firm transmission
rights, ancillary services, congestion expenses, running markets, and
all other costs billed from RTOs in Account 555, Purchased Power.
Furthermore, some commentors indicate that public utilities may be
including some or all of these amounts in their purchased power or
other types of fuel adjustment clause or formula rate calculations and
billings.
76. As previously discussed, the Commission proposes that public
utilities record their share of RTO operational costs in the new
transmission expense Accounts 561.4, 561.8 and 575.7. However, public
utilities incur their own costs for energy, transmission rights,
ancillary services and other services under transactions that are
scheduled and cleared through the RTO settlement process. Some of these
costs do not readily lend themselves to any one particular functional
classification. For example, ancillary service costs may be generation-
related activities but are necessary to keep the transmission grid
working; ancillary services may include the cost of maintaining central
control over generators to adjust power to deal with power surges or
changes in customer demand for energy. Voltage control is another
similar example of an ancillary service that is necessary for the
operation and reliability of the transmission grid. These activities
have characteristics that may arguably fit either the generation or
transmission functional expense accounts.
77. The Commission proposes to include a new schedule in the
quarterly and annual financial reports that will require the public
utility and licensee to report the type of transaction and the related
amount of expense that it is being settled through the RTO. This
information will assist the Commission in determining the need for
future accounting guidance on these matters.
78. Finally, the RTO settlement process may result in a public
utility or licensee being unaware of the counterparty to any given
power sale or purchase transaction facilitated by the RTO. The process
used by the RTO may require a public utility or licensee to bid
generation into the market and then buy its generation from the market
to serve its native load. Some public utilities may net all of their
energy transactions in Account 555, Purchase Power, while others may
report their energy transactions as a distinct purchase or a distinct
sale. Consequently, inconsistent accounting treatment across public
utilities may result from the sale and purchase of power facilitated
through an RTO.
79. The Commission proposes that public utilities or licensees that
conduct energy transactions through an RTO that requires participants
to bid their generation into the market and buy generation to supply
their native load report these transactions on a net basis in Account
555, Purchase Power. The Commission invites comment as to under what
circumstances would it be appropriate for the public utility or
licensee to reflect these types of transactions on a net basis, and
under what circumstances would it be appropriate for the public utility
or licensee to reflect these types of transactions as distinct
purchases and sales.
8. Other Matters
80. The Commission notes that the derivative and asset retirement
accounts established under Order Nos. 627 and 631 were not included in
the Chart of Account listings contained in the USofA. \18\ The
Commission will update the account listing to include the accounts
established under these orders.
---------------------------------------------------------------------------

\18\ See Accounting and Reporting of Financial Instruments,
Comprehensive Income, Derivatives and Hedging Activities, Order No.
627, 67 FR 67,691 (Nov. 6, 2002). See also supra note 12.

---------------------------------------------------------------------------

[[Page 36874]]

G. Conclusion

81. In conclusion, the comments submitted by public utilities,
industry associations, state regulatory bodies and others provided
input and detail needed for the Commission to propose the above
revisions to its regulations. The proposed changes to the Commission's
accounting and financial reporting requirements reflected in this NOPR
include many of the accounting and financial reporting updates offered
by commentors. The Commission is of the view that there would be
little, if any, impact on existing RTO rate designs from the proposed
changes, but seeks comment on this and other related matters raised in
this NOPR.

IV. Proposed Effective Date

82. The Commission proposes the aforementioned accounting and
financial reporting changes and updates to become effective on January
1, 2006.

V. Proposed Changes to the FERC Quarterly and Annual Reports

83. The proposed changes, if adopted, will require revising the
existing schedules in the FERC Forms 1, 1-F and 3-Q filed with the
Commission. Appendix B contains samples of the updated or new schedules
that will be included in these reports and will be available on e-
Library.\19\
---------------------------------------------------------------------------

\19\ Appendix B will not be published in the Federal Register.
---------------------------------------------------------------------------

VI. Information Collection Statement

84. The following collections of information contained in this
proposed rule have been submitted to the Office of Management and
Budget for review under Section 3507(d) of the Paperwork Reduction Act
of 1995.\20\ OMB's regulations require OMB to approve certain
information collection requirements imposed by agency rule.\21\ Upon
approval of a collection of information, OMB will assign an OMB control
number and expiration date. Respondents subject to the filing
requirements of this proposed rule will not be penalized for failing to
respond to these collections of information unless the collections of
information display a valid OMB control number or the Commission had
provided a justification as why the control number should be displayed.
---------------------------------------------------------------------------

\20\ See 44 U.S.C. 3507(d).
\21\ 5 CFR 1320.11.
---------------------------------------------------------------------------

85. Comments are solicited on the need for this information,
whether the information will have practical utility, the accuracy of
the provided burden estimated, ways to enhance the quality, utility,
and clarity of the information to be collected, and any suggested
methods for minimizing respondents' burden, including the use of
automated information techniques. The following burden estimates are
for complying with this proposed rule as follows:

----------------------------------------------------------------------------------------------------------------
Number of Number of Hours per
Data collection respondents responses response Total
----------------------------------------------------------------------------------------------------------------
1 Form 1 (RTOs)................................. 6 1 35 210
2 Form 1 (Non-RTOs)............................. 214 1 11 2,354
3 Form 1-F...................................... 33 1 11 363
4 Form 3-Q (RTOs)............................... 6 3 30 540
5 Form 3-Q (Non-RTOs)........................... 247 3 15 11,115
-----------------
Totals...................................... .............. .............. .............. 14,582
----------------------------------------------------------------------------------------------------------------

Information Collection Costs: The Commission seeks comments on the
cost to comply with these requirements. It has projected the average
annualized cost of all respondents to be the following: 14,582 hrs. +
$905,280 for respondents. No capital startup costs are estimated to be
incurred by respondents.
Annualized Costs (Operations & Maintenance): If adopted, costs for
performing the prepared schedules will be rolled into the total costs
for completing the Commission's annual and quarterly financial reports.
Title: FERC Form 1, ``Annual Report of Major Electric Utilities,
Licensees, and Others''. FERC Form-1F, ``Annual report for Nonmajor
Public Utilities and Licensees''. FERC Form 3-Q, ``Quarterly financial
report of electric utilities, licensees and natural gas companies''.
Action: Proposed information collections.
OMB Control Nos.: 1902-0021; 1902-0029; and 1902-0205.
Respondents: Businesses or other for profit.
Frequency of responses: Annually and quarterly.
Necessity of the Information: The proposed rule would revise the
Commission's regulations to reflect changes that are occurring in the
electric industry due to the availability of open-access transmission
service and increasing competition in the wholesale bulk power
industry. The addition of these new accounts is intended to provide
accounting standards for transactions and events affecting public
utilities and licensees, including independent system operators and
regional transmission organizations, that file financial reports with
the Commission. The accounting regulations currently found in the USofA
and related financial reporting requirements capture financial
information along traditional primary business functions but do not
provide sufficient detailed information concerning RTOs and in
particular the costs incurred by these organizations. The addition of
these accounts is intended to improve the transparency, completeness
and consistency of accounting practices for the cost of assets, the
expenses incurred in providing services, along with revenues collected.
Without specific instructions and accounts for recording and reporting
the above transactions and events, inconsistent and incomplete
accounting and reporting will result.
Internal Review: The Commission has reviewed the requirements
pertaining to the USofA and to the financial reports it prescribes and
determined that the proposed revisions are necessary because the
Commission needs to establish uniform accounting and reporting
requirements for the costs of utility assets and the expenses incurred
for providing services as part of its operations.
86. These requirements conform to the Commission's plan for
efficient information collection, communication, and management within
the electric industry. The Commission has assured itself, by means of
internal review, that there is specific, objective support for the
burden estimates associated with the information requirements.

[[Page 36875]]

87. Interested persons may obtain information on the reporting
requirements by contacting the following: Federal Energy Regulatory
Commission, 888 First Street, NE., Washington, DC 20426 [Attention:
Michael Miller, Office of the Executive Director, Phone (202) 502-8415,
fax: (202) 273-0873, e-mail: michael.miller@ferc.gov ]
88. For submitting comments concerning the collection of
information(s) and the associated burden estimates, please send your
comments to the contact listed above and to the Office of Management
and Budget, Office of Information and Regulatory Affairs, Washington,
DC 20503, Attention: Desk Officer for the Federal Energy Regulatory
Commission; Phone: (202) 395-4650, fax: (202) 395-7285.

VII. Environmental Analysis

89. The Commission is required to prepare an Environmental
Assessment or an Environmental Impact Statement for any action that may
have a significant adverse effect on the human environment.\22\ No
environmental consideration is necessary for the promulgation of a rule
that is clarifying, corrective, or procedural or does not substantially
change the effect of legislation or regulations being amended,\23\ that
addresses information gathering, analysis, and dissemination,\24\ and
also that addresses accounting.\25\ The proposed rule updates Part 101
of the Commission's regulations and does not substantially change the
effect of the underlying legislation or the regulations being revised.
In addition, the proposed rule involves information gathering,
analysis, and dissemination. Therefore this proposed rule falls within
categorical exemptions provided in the Commission's regulations.
Consequently, neither an environmental impact statement nor an
environmental assessment is required.
---------------------------------------------------------------------------

\22\ See Regulations Implementing the National Environmental
Policy Act, Order No. 486, 52 FR 47897 (Dec. 17, 1987), FERC Stats.
& Regs. ] 30,783 (1987).
\23\ See 18 CFR 380.4(a)(2)(ii).
\24\ See 18 CFR 380.4(a)(5).
\25\ See 18 CFR 380.4(c)(16).
---------------------------------------------------------------------------

VIII. Regulatory Flexibility Act

90. The Regulatory Flexibility Act of 1980 (RFA) \26\ generally
requires a description and analysis of the effect that the proposed
rule will have on small entities or a certification that the rule will
not have a significant economic impact on a substantial number of small
entities.
---------------------------------------------------------------------------

\26\ See 5 U.S.C. 601-612.
---------------------------------------------------------------------------

91. The Commission concludes that this rule would not have such an
impact on a substantial number of small entities. Most companies
regulated by the Commission do not fall within the RFA's definition of
a small entity.\27\ The rule applies principally to public utilities
that own, control, or operate facilities for transmitting electric
energy in interstate commerce and not electric utilities per se. The
Commission also concludes that this rule will not impose a significant
burden on industry since the information is already being captured by
their accounting systems and generally being reported at a consolidated
business level.
---------------------------------------------------------------------------

\27\ See 5 U.S.C. 601(3) citing to section 3 of the Small
Business Act, 15 U.S.C. 632. Section 3 of the Small Business Act
defines a ``small-business concern'' as a business which is
independently owned and operated and which is not dominant in its
field of operation. The Small Business Size Standards component of
the North American Industry Classification System defines a small
electric utililty as one that, including its affiliates, is
primarily engaged in generation, transmission, and/or distribution
of electric energy for sale and whose total electric output for the
preceding fiscal years did not exceed 4 million MWh. 13 CFR 121.201.
---------------------------------------------------------------------------

IX. Comment Procedures

92. The Commission invites interested persons to submit comments on
the matters and issues proposed in this notice to be adopted, including
any related matters or alternative proposals that commentors may wish
to discuss. Comments are due August 26, 2005. Comments must refer to
Docket No. RM04-12-000, and must include the commentor's name, the
organization they represent, if applicable, and their address in their
comments. Comments may be filed either in electronic or paper format.
93. Comments may be filed electronically via the eFiling link on
the Commission's Web site at http://www.ferc.gov. The Commission

accepts most standard word processing formats and commentors may attach
additional files with supporting information in certain other file
formats. Commentors filing electronically do not need to make a paper
filing. Commentors that are not able to file comments electronically
must send an original and 14 copies of their comments to: Federal
Energy Regulatory Commission, Office of the Secretary, 888 First Street
NE., Washington, DC 20426.
94. All comments will be placed in the Commission's public files
and may be viewed, printed, or downloaded remotely as described in the
Document Availability section below. Commentors on this proposal are
not required to serve copies of their comments on other Commentors.

X. Document Availability

95. In addition to publishing the full text of this document in the
Federal Register, the Commission provides all interested persons an
opportunity to view and/or print the contents of this document via the
Internet through the Commission's Home page (http://www.ferc.gov) and

in the Commission's Public Reference Room during normal business hours
(8:30 a.m. to 5 p.m. Eastern time) at 888 First Street, NE., Room 2A,
Washington, DC 20426.
96. From the Commission's Home page on the Internet, this
information is available in the Commission's management system, e-
Library. The full text of this document is available on e-Library in
PDF and Microsoft Word format for viewing, printing, and/or
downloading. To access this document in e-Library, type the docket
number excluding the last three digits of this document in the docket
number field.
97. User assistance is available for e-Library and the Commission's
Web site during normal business hours from our Help line at (202) 502-
8222 or the Public Reference Room at (202) 502-8371, Press 0, TTY (202)
502-8659. E-Mail the Public Reference Room at
public.referenceroom@ferc.gov.

List of Subjects in 18 CFR Part 101

Electric power, Electric utilities, Reporting and recordkeeping
requirements, Uniform System of Accounts.

By direction of the Commission.
Linda Mitry,
Deputy Secretary.
In consideration of the foregoing, the Commission proposes to amend
Part 101, Chapter I, Title 18, Code of Federal Regulations, as follows:

PART 101--UNIFORM SYSTEM OF ACCOUNTS PRESCRIBED FOR PUBLIC
UTILITIES AND LICENSES SUBJECT TO THE PROVISIONS OF THE FEDERAL
POWER ACT

1. The authority citation for Part 101 continues to read as
follows:

Authority: 16 U.S.C. 791a-825r, 2601-2645; 31 U.S.C. 9701; 42
U.S.C. 7101-7352, 7651-7651o.
2. In part 101, Balance Sheet Chart of Accounts, Accounts 175, 176,
219, 230, 244, and 245 are added to read as follows:

Balance Sheet Chart of Accounts

Assets and Other Debits

* * * * *

[[Page 36876]]

3. Current and Accrued Assets
* * * * *
175 Derivative instrument assets.
176 Derivative instrument assets-Hedges.
* * * * *

Liabilities and Other Credits

5. Proprietary Capital
* * * * *
219 Accumulated other comprehensive income.
* * * * *
7. Other Noncurrent Liabilities
* * * * *
230 Asset retirement obligations.
8. Current and Accrued Liabilities
* * * * *
244 Derivatives instrument liabilities.
245 Derivative instrument liabilities-Hedges.
* * * * *
3. In part 101, Balance Sheet Accounts, Account 108, paragraph C is
revised to read as follows:

Balance Sheet Accounts

* * * * *
108 Accumulated provision for depreciation of electric utility
plant (Major only).
* * * * *
C. For general ledger and balance sheet purposes, this account
shall be regarded and treated as a single composite provision for
depreciation. For purposes of analysis, however, each utility shall
maintain subsidiary records in which this account is segregated
according to the following functional classification for electric
plant: (1) Steam production, (2) Nuclear production, (3) Hydraulic
production, (4) Other production, (5) Transmission, (6) Distribution,
(7) Regional Transmission and Market Operation, and (8) General. These
subsidiary records shall reflect the current credits and debits to this
account in sufficient detail to show separately for each such
functional classification (a) the amount of accrual for depreciation,
(b) the book cost of property retired, (c) cost of removal, (d)
salvage, and (e) other items, including recoveries from insurance.
Separate subsidiary records shall be maintained for the amount of
accrued cost of removal other than legal obligations for the retirement
of plant recorded in Account 108, Accumulated provision for
depreciation of electric utility plant (Major only).
* * * * *
4. In part 101, Electric Plant Chart of Accounts, Account 351
[Reserved] is removed and Accounts 317, 326, 337, 347, 351.1, 351.2,
351.3, 359.1, and 374 are added to read as follows:

Electric Plant Chart of Accounts

* * * * *
2. Production Plant

A. Steam Production

* * * * *
317 Asset retirement costs for steam production plant.

B. Nuclear Production

* * * * *
326 Asset retirement costs for nuclear production plant (Major
only).

C. Hydraulic Production

* * * * *
337 Asset retirement costs for hydraulic production plant.

D. Other Production

* * * * *
347 Asset retirement costs for other production plant.
3. Transmission Plant
* * * * *
351.1 Computer hardware.
351.2 Computer software.
351.3 Computer equipment
* * * * *
359.1 Asset retirement costs for transmission plant.
4. Distribution Plant
* * * * *
374 Asset retirement costs for distribution plant.
* * * * *
5. In part 101, Electric Plant Chart of Accounts, ``5. General
Plant'' is redesignated as ``6. General Plant'', and a new Account
399.1 is added to read as follows:

Electric Plant Chart of Accounts

* * * * *
399.1 Asset retirement costs for general plant.
6. In part 101, Electric Plant Chart of Accounts, a new section 5,
including accounts 380 through 387, is added to read as follows:

Electric Plant Chart of Accounts

* * * * *
5. Regional Transmission and Market Operation Plant
380 Land and land rights.
381 Structures and improvements.
382 Computer hardware.
383 Computer software.
384 Communication equipment.
385 Miscellaneous Regional Transmission and Market Operation Plant.
386 Asset Retirement Costs for Regional Transmission and Market
Operation Plant.
387 [Reserved]
* * * * *
7. In part 101, Electric Plant Accounts, Accounts 351.1, 351.2 and
351.3 are added to read as follows:

Electric Plant Accounts

* * * * *

351.1 Computer hardware.

This account shall include the cost of computer hardware and
miscellaneous information technology equipment to provide scheduling,
system control and dispatching, and other related activities to support
the transmission function.

ITEMS
1. Personal computers
2. Servers
3. Workstations
4. Energy Manage System (EMS) hardware
5. Supervisory Control and Data Acquisition (SCADA) system hardware
6. Peripheral equipment
7. Networking components

351.2 Computer software.

This account shall include the cost of off-the-shelf and in-house
developed software purchased and used to provide scheduling, system
control and dispatching and other related activities to support the
transmission function.

ITEMS
1. Software licenses
2. User interface software
3. Modeling software
4. Database software
5. Tracking and monitoring software
6. Energy Management System (EMS) software
7. Supervisory Control and Data Acquisition (SCADA) system software
8. Evaluation and assessment system software
9. Operating, planning and transaction scheduling software
10. Reliability applications
11. Market application software

351.3 Communication equipment.

This account shall include the cost of communication equipment
owned and used to acquire or share data and information used to control
and dispatch the system.

ITEMS
1. Fiber optic cable
2. Remote terminal units
3. Microwave towers
4. Global Positioning System (GPS) equipment

[[Page 36877]]

5. Servers
6. Workstations
7. Telephones
8. In Part 101, Electric Plant Accounts, a new section 5, including
accounts 380, 381, 382, 383, 384, 385, and 386, is added to read as
follows:

Electric Plant Accounts

* * * * *

380 Land and Land Rights

This account shall include the cost of land and land rights used in
connection with regional transmission and market operations.

381 Structures and improvements

This account shall include the cost in place of structures and
improvements used for regional transmission and market operations.

382 Computer hardware

This account shall include the cost of computer hardware and
miscellaneous information technology equipment to provide scheduling,
system control and dispatching, system planning, standards development,
market monitoring, and market administration activities. Records shall
be maintained identifying to the maximum extent practicable computer
hardware owned and used for: (1) Scheduling, system control and
dispatching, (2) system planning and standards development, and (3)
market monitoring and market administration activities.

383 Computer software

This account shall include the cost of off-the-shelf and in-house
developed software purchased and used to provide scheduling, system
control and dispatching, system planning, standards development, market
monitoring, and market administration activities. Records shall be
maintained identifying to the maximum extent practicable the cost of
software used for: (1) Scheduling, system control and dispatching, (2)
system planning and standards development, and (3) market monitoring
and market administration activities.

384 Communication equipment

This account shall include the cost of communication equipment
owned and used to acquire or share data and information used to control
and dispatch the system.

ITEMS
1. Fiber optic cable
2. Remote terminal units
3. Microwave towers
4. Global Positioning System (GPS) equipment
5. Servers
6. Workstations
7. Telephones

385 Miscellaneous regional transmission and market operation plant

This account shall include the cost of regional transmission and
market operation plant and equipment not provided for elsewhere.

386 Asset retirement costs for regional transmission and market
operation plant

This account shall include asset retirement costs on regional
control and market operation plant and equipment.

387 [Reserved]

9. In part 101, Operating Revenue Chart of Accounts, new Accounts
456.1, 457.1 and 457.2 are added to read as follows:

Operating Revenue Chart of Accounts

* * * * *
2. OTHER OPERATING REVENUES
* * * * *
456.1 Revenues from transmission of electricity of others.
457.1 Regional transmission service revenues.
457.2 Miscellaneous revenues.
10. In part 101, Income Accounts, Account 456 Item 5 is removed,
and Item 6 is redesignated as Item 5.
11. In part 101, Operating Revenue Accounts, new revenue accounts
456.1, 457.1, and 457.2 are added to read as follows:

Operating Revenue Accounts

* * * * *

456.1 Revenues from transmission of electricity of others

This account shall include revenues from transmission of
electricity of others over transmission facilities of the utility.

457.1 Regional transmission service revenues

This account shall include revenues derived from providing
scheduling, system control and dispatching services. Include also in
this account reimbursements for system planning, standards development,
and market monitoring and market compliance activities. Records shall
be maintained so as to show: (1) The services supplied and revenues
received from each customer and (2) the amounts billed by tariff or
specified rates.

457.2 Miscellaneous revenues

This account shall include revenues and reimbursements for costs
incurred by regional transmission service providers not provided for
elsewhere. Records shall be maintained so as to show: (1) The services
supplied and revenues received from each customer, and (2) the amounts
billed by tariff or specified rates.
12. In part 101, Operation and Maintenance Expense Chart of
Accounts, section 2 ``Transmission Expenses'' is revised to read as
follows:

Operation and Maintenance Expense Chart of Accounts

* * * * *
2. TRANSMISSION EXPENSES
Operation
560 Operation supervision and engineering
561.1 Load dispatch-Reliability
561.2 Load dispatch-Monitor and operate transmission system.
561.3 Load dispatch-Transmission service and scheduling.
561.4 Scheduling, system control and dispatch services.
561.5 Long-term reliability planning and standards development.
561.6 Transmission service studies.
561.7 Generation interconnection studies.
561.8 Long-term reliability planning and standards development
services
562 Station expenses (Major only).
563 Overhead line expenses (Major only).
564 Underground line expenses (Major only).
565 Transmission of electricity by others (Major only).
566 Miscellaneous transmission

[[Page 36878]]

expenses (Major only).
567 Rents.
567.1 Operation supplies and expenses (Nonmajor only).
Maintenance
568 Maintenance supervision and engineering (Major only).
569 Maintenance of structures (Major only).
569.1 Maintenance of computer hardware.
569.2 Maintenance of computer software.
569.3 Maintenance of communication equipment.
569.4 Maintenance of miscellaneous regional transmission plant.
570 Maintenance of station equipment (Major only).
571 Maintenance of overhead lines (Major only).
572 Maintenance of underground lines (Major only).
573 Maintenance of miscellaneous transmission plant (Major only).
574 Maintenance of transmission plant (Nonmajor only).
13. In part 101, Operation and Maintenance Expense Chart of
Accounts, 3. Distribution Expenses, 4. Customer Accounts Expenses, 5.
Customer Service and Informational Expenses, 6. Sales Expense, and 7.
Administrative and General Expenses, are redesignated as 4.
Distribution Expenses, 5. Customer Accounts Expenses, 6. Customer
Service and Informational Expenses, 7. Sales Expense, and 8.
Administrative and General Expenses, respectively.
14. In part 101, Operation and Maintenance Expense Chart of
Accounts, a new section 3, including Accounts 575.1 575.2, 575.3,
575.4, 575.5, 575.6, 575.7, 576.1, 576.2, 576.3, 576.4 and 576.5, is
added to read as follows:

Operation and Maintenance Expense Chart of Accounts

* * * * *
3. REGIONAL MARKET EXPENSES
Operation
575.1 Operation Supervision
575.2 Day-ahead and real-time market facilitation.
575.3 Transmission rights market facilitation.
575.4 Capacity market facilitation.
575.5 Ancillary services market facilitation
575.6 Market monitoring and compliance
575.7 Market facilitation, monitoring and compliance services
Maintenance
576.1 Maintenance of structures and improvements
576.2 software
567.4 Maintenance of communication equipment
567.5 Maintenance of miscellaneous market operation plant
15. In part 101, Operation and Maintenance Expense Accounts, the
first paragraph of Account 556 is revised to read as follows:

Operation and Maintenance Expense Accounts

* * * * *

Account 556 System Control and Load Dispatching (Major Only)

This account shall include the cost of labor and expenses incurred
in load dispatching activities for system control. Utilities having an
interconnected electric system or operating under a central authority
which controls the production and dispatching of electricity may
apportion these costs to this account and transmission expense Accounts
561.1 through 561.4, and Account 581, Load Dispatching-Distribution.
* * * * *
16. In part 101, Operation and Maintenance Expense Accounts,
Account 561, Load Dispatching (Major only) is removed.
17. In part 101, Operation and Maintenance Expense Accounts, new
expense accounts 561.1, 561.2, 561.3, 561.4, 561.5, 561.6, 561.7,
561.8, 569.1, 569.2, 569.3, 569.4, 575.1, 575.2, 575.3, 575.4, 575.5,
575.6, 575.7, 576.1, 576.2, 576.3, 576.4 and 576.5 are added to read as
follows:

Operation and Maintenance Expense Accounts

* * * * *

561.1 Load dispatch-Reliability.

This account shall include the cost of labor, materials used and
expenses incurred by the regional transmission service provider to
manage the region-wide reliability coordination function as specified
by the North American Electric Reliability Council (NERC) and
individual reliability organizations. These activities shall include
performing current and next day reliability analysis. This account
shall include the costs incurred to calculate load forecasts, and
performing contingency analysis.

561.2 Load Dispatch-Monitor and Operate Transmission System.

This account shall include the costs of labor, materials used and
expenses incurred by the regional transmission service provider to
monitor, assess and operate the power system and individual
transmission facilities in real-time to maintain safe and reliable
operation of the transmission system. This account shall also include
the expense incurred to manage transmission facilities to maintain
system reliability and to monitor the real-time flows and direct
actions according to regional plans and tariffs as necessary.

ITEMS
1. Receive and analyze outage requests.
2. Reschedule outage plans.
3. Monitor solution quality field data values, providing model
updates to NERC and coordinating network model changes across all
systems.
4. Conduct operating training related to NERC certification.
5. Monitor generation resources and communicate with generation
owners regarding expected dispatch actions.
6. Ensure ancillary service requirements are met.

561.3 Load Dispatch-Transmission Service and Scheduling

This account shall include the costs of labor, materials used and
expenses incurred by the regional transmission service provider to
process hourly, daily, weekly and monthly transmission service requests
using an automated system such as an Open Access Same-Time Information
System (OASIS). It shall also include the expenses incurred to operate
the automated transmission service request system and to monitor the
status of all scheduled energy transactions.

561.4 Scheduling, System Control and Dispatching Services

This account shall include the costs billed to the transmission
owner, load serving entity or generator for scheduling, system control
and dispatching service. Include in this account service billings for
system control to maintain the reliability of the transmission area in
accordance with reliability standards, maintaining defined voltage
profiles, and monitoring operations of the transmission facilities.

561.5 Long-Term Reliability, Planning and Standards Development

This account shall include the cost of labor, materials used and
expenses incurred for the long-term system planning of the
interconnected bulk electric transmission systems within a planning
authority area. Include also the expenses incurred for long-term system
reliability and resource planning to develop long-term strategies to
meet

[[Page 36879]]

customer demand and energy requirements.

ITEMS
1. Developing and maintaining transmission and resource (demand and
capacity) system models to evaluate transmission system performance and
resource adequacy.
2. Maintaining and applying methodologies and tools for the
analysis and simulation of the transmission systems for the assessment
and development of transmission expansion and resource adequacy plans.
3. Developing demand and energy end-use customer forecasts,
capacity resources, and demand response programs.
4. Assessing, developing and document resource and transmission
expansion plans.
5. Maintaining transmission system models (steady-state, dynamics,
and short circuit).
6. Collecting transmission information and transmission facility
characteristics and ratings.
7. Notifying participants of any planned transmission changes that
may impact their facilities.
8. Developing and reporting on transmission expansion and resource
plans for assessment and compliance with reliability standards.
9. Developing reliability standards for the planning and operation
of the interconnected bulk electric transmission systems that serve the
United States, Canada, and Mexico.
10. Developing criteria and certification procedures for balancing,
interchange, reliability authorities, transmission operators and
others.
11. Outside services employed

Note: The cost of supervision, customer records and collection
expenses, administrative and general salaries, office supplies and
expenses, property insurance, injuries and damages, employee pension
and benefits, regulatory commission expenses, general advertising,
and rents shall be charged to the customer accounts, service, and
administrative and general expense accounts contained in the Uniform
System of Accounts.

561.6 Transmission service studies.

This account shall include the cost of labor, materials used and
expenses incurred to conduct transmission services studies for proposed
interconnections with the transmission system. Detailed records shall
be maintained for each study undertaken and all reimbursements received
for conducting such a study.

561.7 Generation interconnection studies.

This account shall include the cost of labor, materials used and
expenses incurred to conduct generation interconnection studies for
proposed interconnections with the transmission system. Detailed
records shall be maintained for each study undertaken and all
reimbursements received for conducting such a study.

561.8 Long-Term Reliability Planning and Standards Development
Services.

This account shall include the costs billed to the transmission
owner, load serving entity, or generator for long-term system planning
of the interconnected bulk electric transmission system. Include also
the costs billed by the regional transmission service provider for
long-term system reliability and resource planning to develop long-term
strategies to meet customer demand and energy requirements. This
account shall also include fees and expenses for outside services
incurred by the regional control service provider and billed to the
load serving entity, transmission owner or generator.

569.1 Maintenance of computer hardware.

This account shall include the cost of labor, materials used and
expenses incurred in the maintenance of computer hardware serving the
transmission function.

569.2 Maintenance of computer software.

This account shall include the cost of labor, materials used and
expenses incurred for annual computer software license renewals, annual
software update services and the cost of ongoing support for software
products serving the transmission function.

ITEMS
1. Telephone support.
2. Onsite support.
3. Software updates and minor revisions.

569.3 Maintenance of communication equipment.

This account shall include the cost of labor, materials used and
expenses incurred in the maintenance of communication equipment serving
the transmission function.

569.4 Maintenance of miscellaneous regional transmission plant.

This account shall include the cost of labor, materials used and
expenses incurred in the maintenance of miscellaneous regional
transmission plant serving the transmission function.

575.1 Operation supervision.

This account shall include the cost of labor and expenses incurred
in the general supervision and direction of the regional energy
markets.

575.2 Day-Ahead and real-time market facilitation.

This account shall include the cost of labor, materials used and
expenses incurred to facilitate the Day-Ahead and Real-Time markets.
This account shall also include the costs incurred to manage the real-
time deployment of resources to meet generation needs and to provide
capacity adequacy verification. Include in this account the costs
incurred to maintain related sections of the tariff, market rules,
operating procedures, and standards and coordinating with neighboring
areas.

ITEMS
1. Consultant fees and expenses
2. System record and report forms
3. Meals, traveling and incidental expenses

575.3 Transmission rights market facilitation.

This account shall include the cost of labor, materials used and
expenses incurred to manage the allocation and auction of transmission
rights.

575.4 Capacity market facilitation.

This account shall include the cost of labor, materials used and
expenses incurred to manage the allocation of capacity rights.

575.5 Ancillary services market facilitation.

This account shall include the cost of labor, materials used and
expenses incurred to manage all other ancillary services market
functions.

575.6 Market monitoring and compliance.

This account shall include the cost of labor, materials used and
expenses incurred to review market data and operational decisions for
compliance with market rules. It shall also include the costs incurred
to interface with external market monitors.

[[Page 36880]]

575.7 Market facilitation, monitoring and compliance services.

This account shall include the costs billed to the transmission
owner, load serving entity or generator for market facilitation,
monitoring and compliance services.

576.1 Maintenance of structures and improvements.

This account shall include the cost of labor, materials used and
expenses incurred in the maintenance of structures, the book cost of
which is included in account 381, Structures and Improvements. (See
operating expense instruction 2.)

576.2 Maintenance of computer hardware.

The account shall include the cost of labor, materials used and
expenses incurred in the maintenance of computer hardware, the book
cost of which is included in Account 382.

576.3 Maintenance of computer software.

ITEMS
1. Telephone support
2. Onsite support
3. Software updates and minor revisions

576.4 Maintenance of communication equipment.

This account shall include the cost of labor, materials used and
expenses incurred in the maintenance of communication equipment, the
book cost of which is included in Account 384.

576.5 Maintenance of miscellaneous market operation plant.

This account shall include the cost of labor, materials used and
expenses incurred in the maintenance of miscellaneous market operation
plant, the book cost of which is included in Account 386.

Note: The following Appendices will not appear in the Code of
Federal Regulations.

Appendix A--List of Commentors

1 Allegheny Energy Parties
2 American Municipal Power-Ohio, Inc.
3 American Public Power Association
4 Braintree Electric Light Department, Reading Municipal Light
Department, and Taunton Municipal Lighting Plant
5 California Department of Water Resources State Water Project
6 California Municipal Utilities Association
7 Cinergy Services, Inc.
8 City of Santa Clara California
9 Connecticut Department of Public Utility Control and Vermont
Department of Public Service
10 Consolidated Edison Company of New York, Inc., Orange and
Rockland Utilities, Inc., Central Hudson Gas & Electric Corporation,
New York State Electric & Gas Corporation and Rochester Gas &
Electric Corporation
11 Edison Electric Institute
12 EPIC Merchant Energy, LP
13 Electric Consumers Resource Council
14 Electric Power Supply Association
15 Iowa Office of Consumer Advocate and Indiana Office of Utility
Consumer Counselor
16 International Transmission Company
17 ISO New England Inc.
18 ISO/RTO Council
19 LG&E Energy, LLC
20 Long Island Power Authority, Long Island Power Authority and New
York Power Authority
21 Madison Gas & Electric Company
22 Midwest Independent Transmission System Operator, Inc.
23 Midwest ISO Transmission Owners
24 Organization of MISO States
25 Modesto Irrigation District
26 National Grid USA
27 New England Power Pool Participants Committee
28 New York Municipals & Cooperatives
29 NiSource
30 Northern California Power Agency
31 National Rural Electric Cooperative Association
32 PJM Interconnection, L.L.C.
33 Pacific Gas and Electric Company
34 PPL Parties
35 Public Service Electric and Gas Company and PSEG Energy Resources
& Trading LLC
36 The Honorable Doug Ose, U.S. House of Representatives
37 The Honorable Paul E. Gillmor, U.S. House of Representatives
38 Sector Elected Representatives of the PJM Finance Committee
39 Southern California Edison Company
40 Transmission Agency of Northern California
41 Transmission Access Policy Study Group
42 Transmission Dependent Utility Systems
43 TXU Portfolio Management Company LP and TXU Pedricktown
Cogeneration Company LP
44 Virginia Electric and Power Company
45 Wisconsin Electric Power Company
46 Xcel Energy Services Inc.
BILLING CODE 6717-01-P

[[Page 36881]]

[GRAPHIC] [TIFF OMITTED] TP27JN05.000

[[Page 36882]]

[GRAPHIC] [TIFF OMITTED] TP27JN05.001

[[Page 36883]]

[GRAPHIC] [TIFF OMITTED] TP27JN05.002

[[Page 36884]]

[GRAPHIC] [TIFF OMITTED] TP27JN05.003

[[Page 36885]]

[GRAPHIC] [TIFF OMITTED] TP27JN05.004

[[Page 36886]]

[GRAPHIC] [TIFF OMITTED] TP27JN05.005

[[Page 36887]]

[GRAPHIC] [TIFF OMITTED] TP27JN05.006

[[Page 36888]]

[GRAPHIC] [TIFF OMITTED] TP27JN05.007

[[Page 36889]]

[GRAPHIC] [TIFF OMITTED] TP27JN05.008

[[Page 36890]]

[GRAPHIC] [TIFF OMITTED] TP27JN05.009

[[Page 36891]]

[GRAPHIC] [TIFF OMITTED] TP27JN05.010

[[Page 36892]]

[GRAPHIC] [TIFF OMITTED] TP27JN05.011

[[Page 36893]]

[GRAPHIC] [TIFF OMITTED] TP27JN05.012

[[Page 36894]]

[GRAPHIC] [TIFF OMITTED] TP27JN05.013

[[Page 36895]]

[GRAPHIC] [TIFF OMITTED] TP27JN05.014

[[Page 36896]]

[GRAPHIC] [TIFF OMITTED] TP27JN05.015

[[Page 36897]]

[GRAPHIC] [TIFF OMITTED] TP27JN05.016

[[Page 36898]]

[GRAPHIC] [TIFF OMITTED] TP27JN05.017

[[Page 36899]]

[GRAPHIC] [TIFF OMITTED] TP27JN05.018

[FR Doc. 05-12626 Filed 6-24-05; 8:45 am]

BILLING CODE 6717-01-C